Cool consumer climate for autumn / Findings of the GfK consumer climate survey in October 2003
Nuremberg (ots) - As the temperatures have fallen in October, so the consumer mood also seems to have cooled again. Consumers currently have low expectations of general economic development and their own finances, and are remaining reticent when it comes to making purchases.
On the economic development front, consumer expectations in Germany remain low. With -10.5 points in October, the indicator is almost down to the previous month's level of -10.6. The positive impetus in June to August, when the economic outlook indicator rose by nearly 20 points, is nowhere to be seen in October. Compared to October 2002, the indicator is down by 12 points.
Following consumers' optimistic assessment of their personal finances in September, the consumer mood cooled once again in October. Income expectations have been fluctuating in recent months, with consumers evidently not knowing what the future holds in terms of future income. At -6.9, the indicator was up by a good 6 points in October, more than compensating for the 5-point rise of the previous month.
Against the backdrop of stagnating economic and income expectations, it is hardly surprising that consumers see no reason to stray from the reluctance to buy which has been evident for nearly two years now. Despite the slight recovery (0.7 points) of the buying propensity indicator in October, with -30.9 points, the indicator remains at a very low level. Even though it is slightly up on the previous year's level, the overall low value is not very promising for retail in the next few months.
The current development of the consumer indicators suggests that the general consumer climate indicator is stagnating. It is set to reach 5.2 points in November, which, although 0.1 points up on October, is far too low to trigger any positive change.
Once the German government announced that the tax reform was to go ahead, consumer expectations regarding their income improved dramatically. However, the more discussion on the financing of tax reform, the more consumer hopes of a potential easing of the income situation began to fade, being replaced by fears of additional strains. At the moment, consumers are completely in the dark as to what changes there will be to their income situation at the beginning of 2004. As it is likely to be the end of the year before the financial consequences of the reform plans currently being discussed become clear, the topics of consumer climate and consumption recovery may unfortunately be in hibernation.